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20 Sep 2017

BY Rob Gill

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Abta in talks with government to review cost of card interchange fees

Abta is to step up its lobbying of government to bring down the cost of taking card payments, which will have an even greater impact on agents’ bottom lines come 2018.

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"There’s due to be a statutory review in 2019 but we will be aiming to put together an evidence base before that"

Travel companies will be banned from charging fees for credit cards and other payment methods such as Apple Pay and Paypal From January 2018, as part of the implementation of the EU Payment Services Directive 2 (PSD2). There are fears this could have a severe effect on agents financially as they will no longer be able to pass on the direct costs, such as interchange fees (the handling fee charged by a customer’s card company to the agent’s merchant acquirer).


During a TTG Facebook Live discussion last week, Abta’s senior public affairs manager Luke Petherbridge said the government was “aware” of the negative effect these changes could have on travel agents.


Petherbridge said Abta was talking to the Treasury, the Department for Business, Energy and Industrial Strategy, and the Department for Transport to press for an earlier review into how banks and credit card firms charge interchange fees as well as the “duplication of financial protection” within the travel industry.


“It relates to the interchange regulations and the failure to bring down the cost of taking card payments across the board, which was meant to happen before the ban came in,” explained Petherbridge.


“That’s where we will be focusing our lobbying over the next few months until we get a change.
There’s due to be a statutory review in 2019 but we will be aiming to put together an evidence base before that, trying to get them to bring forward a review.”


Interchange fees for debit and credit cards have been capped by the EU at 0.2% and 0.3% respectively since December 2015. But this rule has not reduced the costs for travel firms taking card payments, which Abta has described as “excessively high”.


Julia Lo Bue-Said, managing director of The Advantage Travel Partnership, urged the industry to work together to show the government its impact.


“We need to provide a package of evidence to help organisations like Abta lobby on our behalf,” she said during the Facebook Live discussion.

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